Behind the Headlines: Penniless doctor 'should have stuck to medicine'

In what is set to be a battle of David and Goliath proportions, Dr Debases Kanjilal is attempting to sue Merrill Lynch star analyst, Henry Blodget, over share advice that has left him penniless.

Kanjilal bought shares in online directory service Infospace at $122 per share, now worth around $4, after Blodget set a target price of $160. The suit alleges that Blodget failed to disclose that Merrill Lynch had a conflict of interest, after acting as a financial adviser to a company that was later to be acquired by Infospace.

Speaking on silicon.com's Behind the Headlines programme, Jonathon Steel of the Bathwick Group backed Kanjilal's claims, saying: "As a professional analyst, employed by a major investment bank, they must take some responsibility."

Steel continued: "This is a very important test case, and although I don't think Kanjilal will win, a link between what Blodget said and what shares the bank was involved in needs to come out."

Rene Carayol, CEO of Voodoo, didn't hold much hope for Kanjilal seeing a return on his ill-fated investment, but said: "If people pay for a professional service and they screw up, then I would sue the hell out of them."

Steel went on to blast the way analysts in the industry are put on pedestals. "It's ridiculous. Blodget has always dramatically over-estimated analyst share prices. They must show some respect to the market," he said.

Geoff Petherick, CEO of CMG, pointed out however that Kanjilal knew the stakes were high: "Any gambler worth their salt wouldn't take on these odds, which are around 100,000 to one."

The final quote of the programme - which can be seen by clicking on the video icon above - summed up the predicament faced by Kanjilal, who should have heeded the 'high risk' advice of the small print, according to Carayol. "A doctor should stick to medicine," he concluded.